The Demand for Programs at a College Football Game: OLS and LMS Estimates of Optimal Prices

Abstract

College athletic directors face the difficulty of setting a price for goods and services they provide to the public. One complementary good provided as a part of major college sports events is game-day programs. This paper estimates a demand function for football programs using 11 years of data for an NCAA Division I-AA college. Least median of squares (LMS), a new outlier-resistant estimation technique, is used to refine the model and provide a more useful estimate of the demand function. The revenue- and profit-maximizing program price is found and compared with prices actually charged throughout the sample period.